Fleet News

MPs cash in on mileage rates

BUSINESS mileage reimbursement rates for Members of Parliament and the House of Lords dwarf those available to employees using their own private cars for business journeys. Reimbursement rates for politicians have risen in line with inflation over the past year, but the Government froze the upper limit for private drivers in this year's Budget.

MPs receive 52.5p per mile for the first 20,000 business miles covered in their own cars and 24.2ppm for subsequent business mileage, regardless of the size of the car. This means an MP covering 20,000 business miles is entitled to reimbursement of £10,500.

Members of the House of Lords quietly received an increase in their allowance in April, and now receive 53.7p per mile for the first 20,000 business miles and 24.8ppm for subsequent business mileage, generating £10,740 over 20,000 miles, regardless of the size of the car.

But an ordinary employee using his own car for business journeys is entitled to significantly less lucrative reimbursement under the Inland Revenue Authorised Mileage Rates. These rates entitle a driver with a sub-1,500cc car to 40ppm for the first 4,000 business miles and 25ppm for subsequent miles. An employee with a 1,501-2,000cc car is entitled to 45ppm for the first 4,000 business miles, and 25ppm for subsequent miles. And a driver with a 2,001+cc car can receive 63ppm for the first 4,000 business miles, followed by 36ppm for subsequent miles.

This means a driver covering 20,000 business miles in his private car could reclaim £8,280 in 2,001+cc cars, £5,600 in a car with an engine between 1,501cc and 2,000cc and £5,400 in a car of 1,500cc or less. From next year, fleet drivers will be reimbursed in a two-band system, offering 40ppm for the first 10,000 miles, and 25ppm thereafter, giving a 20,000-miles driver £6,500 - a massive £4,000 less than his local MP.

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